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LeoGlossary: Conduit Theory
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Also called the pipeline theory.
The theory that states that because regulated investment companies merely act as conduits for the passage of dividends, interest, and capital gains to stockholders, these income items should not be taxed once to a company and again to the company's shareholders. If an investment company complies with certain federal regulations, the income is taxed only to the stockholders receiving the distributions.
General:
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